Burlington automotive company says the 3-3 vote stops their effort to open a dealership on the street
By Lauris Olson
(April 11, 2012 – 8 a.m.) Deery Brothers of Burlington will not be bringing an auto dealership to Ames, the brothers said tonight following the city council’s refusal to establish tax abatement criteria along a portion of SE 16th Street.
Setting the criteria was the first of three actions the council would have needed to complete to allow Deery Brothers and future other businesses apply for city property tax abatements to compensate for raising their building lots in the flood prone area.
The Deerys had originally asked the council for a five-year abatement to bring a Chrysler, Dodge and Jeep dealership to Ames. Ames has a policy of offering partial five-year abatements or full abatements for three years. The vote on the criteria did not address abatement options.
Brad Deery estimated that the dealership, once completed, would yield about $180,000 yearly in property taxes and that the other two lots they planned on leasing or selling to others could provide another $350,000 a year in property taxes.
He also estimated that the dealership would employee 40 people at an average salary and benefits cost of $63,000.
He also told council members before the vote that without an abatement, the project would not happen.
Council member Tom Wacha responded that he was having difficulty believing that the brothers would walk away.
“I’m not a businessman but I find it very difficult to believe that this project would not move forward without abatement,” said Wacha.
“It is located in Ames by a major highway. They have done a market analysis. Look at the money the have already invested; the talks they have already had with Chrysler. I can’t believe that $100,000 to $200,000 for three years is the difference for this to not be viable. I just can’t square it my head to support abatement.”
After they left the council chambers, the Deery brothers repeated their assertion that without abatement, the deal was dead.
“That was our offer,” said Brad, the family’s spokesman. “This is what we needed for the financials to work for us.”
He said that his family had not finalized the purchase of the 26 acres at the southwest corner of SE 16th St. and South Dayton Road.
The council vote was a tie, effectively defeating a motion defining the criteria. Jeremy Davis, Jami Larson and Peter Orazem voted ‘yes.” Wacha, Matthew Goodman and Victoria Szopinski voted “no.”
Larson focused his support on the fact that no new development had occurred along SE 16th Street despite a $4 million infrastructure investment several years ago.
Orazem also mentioned the city’s expenditures to widen and pave the road. He also said the Deery Brothers plan for development, which included a 5-acre drainage pond to contain flood waters was “better than what the city might get from another, non-abated, business in the future,
Wacha reminded the other council members that he has said repeatedly that it is the responsibility of businesses on South Duff Avenue, another area in the Skunk River flood plain, to adjust their business plans to take the risk of flooding into account, not the city’s.
During deliberations, Szopinski sounded like she might be voting “yes.
“I feel that I need to say that I came up with a list of pros and cons. My con list was very much fueled by my philosophy that I do not want to encourage crony capitalism and winner take all politics that I believe exists in Ames and through out America.”
Goodman has voiced his opposition since the Deery request first came before the council, emphasizing his belief that tax abatements put the city in the position “of picking winners and losers.
“[A resident] said earlier tonight that he was astounded that someone would want to put a business in a flood plain. I wish I was astounded that human beings that share our space who are very successful and talented would ask for help they possibly don’t need.
“I have been running businesses for decades. I have asked for loans from banks and family and friends, but I have never come to government saying ‘This isn’t working for me. I know that every one else in the community who does what I do is making it without government help but I want some help.’ I don’t think that is fair … I don’t think it is government’s responsibility to recruit new retail businesses to compete against existing retail businesses.”